Mobile Data Trends and Networks Fit for Purpose

Mobile Data Trends and Networks Fit for Purpose Focus on SEE Robert Pepper Vice President Global Technology Policy 20 March 2013 SEE Mobility Summit 2013 Cisco and/or its affiliates. All rights reserved. 1

Cisco Visual Networking Index (VNI) Expanding the Scope of Cisco s IP Thought Leadership Cisco VNI Forecast research is an ongoing initiative to predict global traffic growth. This study focuses on consumer and business mobile data traffic and its key drivers. Global Forecast Data Global Mobile Speed Data Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 2013 Cisco and/or its affiliates. All rights reserved. 2

Global Mobile Data Traffic Drivers More Mobile Users More Mobile Connections Faster Mobile Speeds More Mobile Video Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 2013 Cisco and/or its affiliates. All rights reserved. 3

Global Mobile Data Traffic Growth / Top-Line Global Mobile Data Traffic will Increase 13X from 2012 to 2017 12 66% CAGR 2012 2017 11.2 EB Exabytes per Month 10 8 6 4 2 0 0.9 EB Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 4.7 EB 2.8 EB 1.6 EB 7.4 EB 2012 2013 2014 2015 2016 2017 2013 Cisco and/or its affiliates. All rights reserved. 5

CEE Mobile Data Traffic Growth / Top-Line CEE-R Mobile Data Traffic will Increase 11X from 2012 to 2017 600 63% CAGR 2012 2017 546 PB Petabytes per Month 500 400 300 200 100 0 48 PB 247 PB 148 PB 83 PB 379 PB 2012 2013 2014 2015 2016 2017 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017; CEE excluding Russia 2013 Cisco and/or its affiliates. All rights reserved. 6

Exabytes per Month WE Mobile Data Traffic Growth / Top-Line WE Mobile Data Traffic will Increase 8X from 2012 to 2017 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 0.2 EB 0.3 EB Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 0.4 EB 0.7 EB 50% CAGR 2012 2017 1 EB 1.4 EB 2012 2013 2014 2015 2016 2017 2013 Cisco and/or its affiliates. All rights reserved. 7

VNI Projections and Actuals (Global) Actual Growth Has Been Within 10% of Projected Growth Exabytes per month 50 45 42.2 43.1 40 35 30 25 20 15 10 5 0 IP Traffic in 2012 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 32.7 Projected in 2009 33.9 Internet & Mobile Traffic in 2012 2013 Cisco and/or its affiliates. All rights reserved. 8

VNI Mobile Forecast Update, 2012 2017 Top 6 Mobile Networking Trends Device Diversification Impact of 4G Connections on Traffic The Impact of Tiered Pricing Shake-Up at the Top Traffic Offload from Mobile Networks to Fixed Networks The (Mobile) Internet of Things Mobile Video and Cloud 2013 Cisco and/or its affiliates. All rights reserved. 10

Global Average Traffic Per Mobile Device Type 2012 MBs per Month 2017 MBs per Month Non-Smartphone 6.8 31 M2M 64 330 Smartphone 342 2,660 4G Smartphone 1,302 5,114 Tablet 820 5,387 Laptop 2,503 5,731 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 2013 Cisco and/or its affiliates. All rights reserved. 11

Global Mobile Device Growth by Type By 2017, Smartphones Will Gain 11 Points to Reach 27% Share Billions of Devices 12 10 8 6 4 2 Other Portable Devices (.9%) Tablets (2.3%) Laptops (2.6%) M2M (16.5%) Smartphones (27.4%) Figures (n) refer to 2017 device share 8% CAGR 2012 2017 0 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 2012 2013 2014 2015 2016 2017 2013 Cisco and/or its affiliates. All rights reserved. 12

Global Mobile Data Traffic Growth by Device In 2013, Smartphone Traffic Surpass Mobile Laptop Traffic Exabytes per Month 12 10 8 6 4 2 Other Portable Devices (.2%) Non-Smartphones (1.4%) M2M (5.1%) Tablets (11.7%) Laptops (14.0%) Smartphones (67.5%) Figures (n) refer to 2017 device share 66% CAGR 2012 2017 0 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 2012 2013 2014 2015 2016 2017 2013 Cisco and/or its affiliates. All rights reserved. 13

WE Mobile Device Growth by Type By 2017, Smartphones Will Have 37% Share in 2017 Billions of Devices 1.2 1.0 0.8 0.6 0.4 0.2 Other Portable Devices (1%, 2%) Tablets (2%, 6%) Laptops (5%, 5%) M2M (11%, 37%) Smartphones (30%, 37%) Figures (n) refer to 2012 and 2017 device share 10% CAGR 2012 2017 0.0 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 2012 2013 2014 2015 2016 2017 2013 Cisco and/or its affiliates. All rights reserved. 14

CEE Mobile Device Growth by Type By 2017, Non-Smartphones Still Dominant in Numbers Millions of Devices 700 600 500 400 300 200 100 Other Portable Devices (0%, 0%) Tablets (0%, 2%) Laptops (3%, 3%) M2M (7%, 22%) Smartphones (15%, 22%) Figures (n) refer to 2012 and 2017 device share 6% CAGR 2012 2017 0 2012 2013 2014 2015 2016 2017 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017; CEE excluding Russia 2013 Cisco and/or its affiliates. All rights reserved. 15

CEE Mobile Data Traffic Growth by Device Smartphone Traffic Surpasses Laptop Traffic in 2013 Petabytes per Month 600 500 400 300 200 100 Other Portable Devices (0%, 0%) Non-Smartphones (4%, 4%) M2M (4%, 6%) Tablets (1%, 12%) Laptops (51%, 19%) Smartphones (40%, 59%) Figures (n) refer to 2012 and 2017 device share 63% CAGR 2012 2017 0 2012 2013 2014 2015 2016 2017 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017; CEE excluding Russia 2013 Cisco and/or its affiliates. All rights reserved. 16

Global Connections by Network Type 2G, 3G, and 4G Technology Connection Share Billions of Devices or Connections 7 6 5 4 3 2 1 0 4G 3G 76% 23% 1% Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 57% 33% 10% 2012 2013 2014 2015 2016 2017 2013 Cisco and/or its affiliates. All rights reserved. 18

WE Connections by Network Type 2G, 3G, and 4G Technology Connection Share Millions of Devices or Connections 700 600 500 400 300 200 4G 3G 56% 44% 70% 18% 100 0 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 12% 1% 2012 2013 2014 2015 2016 2017 2013 Cisco and/or its affiliates. All rights reserved. 19

CEE Connections by Network Type 2G, 3G, and 4G Technology Connection Share Millions of Devices or Connections 400 350 300 250 200 150 100 50 0 4G 3G 77% 22% 0% 72% 2012 2013 2014 2015 2016 2017 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017; CEE excluding Russia 21% 8% 2013 Cisco and/or its affiliates. All rights reserved. 20

Global Mobile Data Traffic Growth: 4G 4G Will Be 10% of Connections and 45% of Traffic in 2017 Exabytes per Month 10 8 6 4 2 10% 76% 14% 2-2.5G 3-3.5G 4G 51% 45% 0 2012 2013 2014 2015 2016 2017 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 4% 2013 Cisco and/or its affiliates. All rights reserved. 21

CEE Mobile Data Traffic Growth: 4G 4G Will Be 8% of Connections and 37% of Traffic in 2017 Petabytes per Month 600 500 400 300 200 100 22% 76% 2% 2-2.5G 3-3.5G 4G 60% 37% 0 2012 2013 2014 2015 2016 2017 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017; CEE excluding Russia 3% 2013 Cisco and/or its affiliates. All rights reserved. 22

Top Mobile User Profiles: 2010 2012 Top 1% Consumption Steadily Decreasing Compared to 99% Percentage of top 1 Percent to total MB/mo 60% 50% 40% 30% 20% 10% 0% 52% Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 24% Top 1 percent 16% Jan-10 Sep-11 Sep-12 2013 Cisco and/or its affiliates. All rights reserved. 24

Global Mobile Data Traffic Offload 22% of Mobile Traffic to be Offloaded in 2016 11% of Mobile Traffic Offloaded in 2011 Exabytes per Month 16 14 12 10 8 6 4 2 0 Offload Traffic from Mobile Devices Cellular Traffic from Mobile Devices 2011 2012 2013 2014 2015 2016 Source: Cisco Visual Networking Index (VNI) Global Mobile Data Traffic Forecast, 2011 2016 22% 78% 2012 FORECAST 2013 Cisco and/or its affiliates. All rights reserved. 26

Global Mobile Data Traffic Offload 46% of Mobile Traffic to be Offloaded in 2017 33% of Mobile Traffic Offloaded in 2012 Exabytes per Month 20 15 10 5 Offload Traffic from Mobile Devices Cellular Traffic from Mobile Devices 46% 54% 0 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 2012 2013 2014 2015 2016 2017 2013 Cisco and/or its affiliates. All rights reserved. 27

CEE Mobile Data Traffic Offload 29% of Mobile Traffic to be Offloaded in 2017 19% of Mobile Traffic Offloaded in 2012 Petabytes per Month 900 800 700 600 500 400 300 200 100 0 Offload Traffic from Mobile Devices Cellular Traffic from Mobile Devices 2012 2013 2014 2015 2016 2017 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017; CEE excluding Russia 29% 71% 2013 Cisco and/or its affiliates. All rights reserved. 28

WE Mobile Data Traffic Offload 51% of Mobile Traffic to be Offloaded in 2017 32% of Mobile Traffic Offloaded in 2012 Exabytes per Month 3.0 2.5 2.0 1.5 1.0 0.5 Offload Traffic from Mobile Devices Cellular Traffic from Mobile Devices 51% 49% 0.0 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 2012 2013 2014 2015 2016 2017 2013 Cisco and/or its affiliates. All rights reserved. 29

US Mobile Data Traffic Offload 66% of Mobile Traffic to be Offloaded in 2017 47% of Mobile Traffic Offloaded in 2012 Exabytes per Month 6.0 5.0 4.0 3.0 2.0 1.0 Offload Traffic from Mobile Devices Cellular Traffic from Mobile Devices 66% 34% 0.0 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017 2012 2013 2014 2015 2016 2017 2013 Cisco and/or its affiliates. All rights reserved. 30

Global IP Traffic by Local Access Technology By 2016, Fixed/Wi-Fi Traffic Surpasses Fixed/Wired Traffic Exabytes per Month 120 100 80 60 40 20 Mobile Data (70% CAGR) Fixed/Wired (20% CAGR) Fixed/Wi-Fi (34% CAGR) 28% CAGR 2011 2016 7% 40% 53% 0 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2011 2016 2011 2012 2013 2014 2015 2016 2013 Cisco and/or its affiliates. All rights reserved. 31

Global IP Traffic by Local Access Technology With Wi-Fi Offload Exabytes per Month 120 100 80 60 40 20 Mobile Data (70% CAGR) Fixed/Wired (20% CAGR) Fixed/Wi-Fi from Offload (112% CAGR) Fixed/Wi-Fi (31% CAGR) 27% CAGR 2011 2016 7% 40% 6% 47% 0 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2011 2016 2011 2012 2013 2014 2015 2016 2013 Cisco and/or its affiliates. All rights reserved. 32

CEE IP Traffic by Local Access Technology With Wi-Fi Offload Exabytes per Month 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Mobile Data (69% CAGR) Fixed/Wired (19% CAGR) Fixed/Wi-Fi from Offload (109% CAGR) Fixed/Wi-Fi (48% CAGR) 2011 2012 2013 2014 2015 2016 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2011 2016; CEE excluding Russia 35% CAGR 2011 2016 10% 32% 4% 55% 2013 Cisco and/or its affiliates. All rights reserved. 33

CEE Mobile Users and Devices Users Grow at 1% CAGR, Devices Grow at 6% CAGR Millions 900 800 700 600 500 400 300 200 100 0 Devices Users 590 319 2012 2013 2014 2015 2016 2017 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017; CEE excluding Russia 785 342 2013 Cisco and/or its affiliates. All rights reserved. 35

CEE M2M Mobile Data Traffic Growth M2M Data Traffic will Increase 19X from 2012 to 2017 35 30 80% CAGR 2012 2017 32 PB per mo Petabytes per Month 25 20 15 10 5 0 2 PB per mo 2012 2013 2014 2015 2016 2017 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017; CEE excluding Russia 2013 Cisco and/or its affiliates. All rights reserved. 36

CEE Mobile Data Traffic Growth / Apps Video to Exceed 63 Percent of Mobile Data Traffic by 2017 Petabytes per Month 600 500 400 300 200 100 Mobile File Sharing (7.5%) Mobile M2M (5.8%) Mobile Web/Data (22.9%) Mobile Video (63.7%) Figures (n) refer to 2017 traffic share 63% CAGR 2012 2017 0 2012 2013 2014 2015 2016 2017 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017; CEE excluding Russia 2013 Cisco and/or its affiliates. All rights reserved. 38

CEE Mobile Cloud Traffic Cloud Accounted for 68% of Mobile Data Traffic in 2012 Cloud Will Account for 81% of Mobile Data Traffic by 2017 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 32% 30% 27% 24% 22% 19% 68% 70% 73% 76% 78% 81% 2012 2013 2014 2015 2016 2017 Mobile Cloud Traffic Mobile Non-Cloud Traffic Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012 2017; CEE excluding Russia 2013 Cisco and/or its affiliates. All rights reserved. 39

Global Cloud Readiness Business & Consumer Network Requirements for Individual Apps Basic Cloud Apps Network Requirements: Download Speed: Up to 750 kbps Upload Speed: Up to 250 kbps Latency: Above 160 ms Text communications (email, instant messaging) Web browsing File sharing (low-res video) Web conferencing Social networking (basic text only) Stream basic video/ music Intermediate Cloud Apps Network Requirements: Download Speed: 751 2,500 kbps Upload Speed: 251 1,000 kbps Latency: 159-100 ms File sharing (high-res video) IP Telephony ERP / CRM Basic gaming (single player) Basic video chat (low-res video) IP audio conferencing Basic video conferencing (low-res video) Advanced social networking (multimedia/interactivity) HD video streaming Advanced Cloud Apps Network Requirements: Download Speed: Higher than 2,500 kbps Upload Speed: Higher than 1,000 kbps Latency: Less than 100 ms HD Industrial design collaboration Advanced gaming (multi player) Advanced video chat (high-res video) Advanced file sharing (super high-res video) HD audio conferencing HD video conferencing (high-res video) Stream super HD video 2013 Cisco and/or its affiliates. All rights reserved. 40

Global Cloud Readiness Business & Consumer Network Requirements for Concurrent Apps Basic Cloud Apps Concurrency Bucket Network Requirements: Download Speed: ~1900 kbps Upload Speed: ~600 kbps Latency: Above 160 ms Text communications (email, instant messaging) Web browsing File sharing (low-res video) Web conferencing Social networking (basic text only) Stream basic video/ music Intermediate Cloud Apps Concurrency Bucket Network Requirements: Download Speed: ~7,000 kbps Upload Speed: ~2,600 kbps Latency: 159-100 ms File sharing (high-res video) IP Telephony ERP / CRM Basic gaming (single player) Basic video chat (low-res video) IP audio conferencing Basic video conferencing (low-res video) Advanced social networking (multimedia/interactivity) HD video streaming Advanced Cloud Apps Concurrency Bucket Network Requirements: Download Speed: ~21,000 kbps Upload Speed: ~9,000 kbps Latency: Less than 100 ms HD Industrial design collaboration Advanced gaming (multi player) Advanced video chat (high-res video) Advanced file sharing (super high-res video) HD audio conferencing HD video conferencing (high-res video) Stream super HD video 2013 Cisco and/or its affiliates. All rights reserved. 41

Fixed Networks Upload/ Download Speeds Average Upload Speed (kbps) 25,000 20,000 15,000 10,000 5,000 - Other Countries Russia Ukraine Czech Rep. Slovenia Estonia Slovakia Hungary Armenia Georgia Macedonia Poland Albania Belarus Turkey Serbia Croatia Azerbaijan Montenegro Bosnia & H. Central and Eastern Europe Moldova Latvia Bulgaria Romania Lithuania - 5,000 10,000 15,000 20,000 25,000 30,000 Average Download Speed (kbps) Source: Ookla Speedtest.net Net Index 2013 Cisco and/or its affiliates. All rights reserved. 42

Fixed Speeds + Latency: CEE Countries Average Upload Speed (kbps) 25,000 20,000 15,000 10,000 5,000 - Less than 100ms Russia Ukraine Czech Rep. Slovenia Estonia Slovakia Hungary Armenia Georgia Macedonia Poland Belarus Turkey Albania Azerbaijan Serbia Bosnia & H. Croatia Montenegro Moldova 100ms - 159ms Latvia Bulgaria Romania Lithuania - 5,000 10,000 15,000 20,000 25,000 30,000 Average Download Speed (kbps) Source: Ookla Speedtest.net Net Index 2013 Cisco and/or its affiliates. All rights reserved. 43

Fixed Speeds + Latency: CEE Countries Average Upload Speed (kbps) 25,000 20,000 15,000 10,000 5,000 - Less than 100ms Slovenia Moldova Ave download: 7.2mbps Russia Ukraine Ave upload: 4.2mbps Ave latency: 50ms Czech Rep. Slovenia Estonia Slovakia Hungary Armenia Georgia Macedonia Poland Belarus Turkey Albania Azerbaijan Serbia Bosnia & H. Croatia Montenegro 100ms - 159ms Latvia Bulgaria Romania Lithuania - 5,000 10,000 15,000 20,000 25,000 30,000 Average Download Speed (kbps) Source: Ookla Speedtest.net Net Index 2013 Cisco and/or its affiliates. All rights reserved. 44

Fixed Speeds + Latency: CEE Countries Average Upload Speed (kbps) 25,000 20,000 15,000 10,000 5,000 - Less than 100ms Croatia Moldova Ave download: 4.2mbps Russia Ukraine Ave upload: 0.7mbps Ave latency: 62ms Czech Rep. Slovenia Estonia Slovakia Hungary Armenia Georgia Macedonia Poland Belarus Turkey Albania Azerbaijan Serbia Bosnia & H. Croatia Montenegro 100ms - 159ms Latvia Bulgaria Romania Lithuania - 5,000 10,000 15,000 20,000 25,000 30,000 Average Download Speed (kbps) Source: Ookla Speedtest.net Net Index 2013 Cisco and/or its affiliates. All rights reserved. 45

Fixed Speeds + Latency: CEE Countries Average Upload Speed (kbps) 25,000 20,000 15,000 10,000 5,000 - Less than 100ms Russia Ukraine Czech Rep. Slovenia Estonia Slovakia Hungary Armenia Georgia Macedonia Poland Belarus Turkey Albania Azerbaijan Serbia Bosnia & H. Croatia Montenegro Moldova 100ms - 159ms Latvia Bulgaria Romania Lithuania - 5,000 10,000 15,000 20,000 25,000 30,000 Average Download Speed (kbps) Bulgaria Ave download: 19.0mbps Ave upload: 12.2mbps Ave latency: 35ms Source: Ookla Speedtest.net Net Index 2013 Cisco and/or its affiliates. All rights reserved. 46

Fixed Speeds + Latency: CEE Countries Average Upload Speed (kbps) 25,000 20,000 15,000 10,000 5,000 - Less than 100ms Bosnia & H. Russia Moldova Ukraine Ave download: 2.9mbps Ave upload: 0.6mbps Ave latency: 69ms Czech Rep. Slovenia Estonia Slovakia Hungary Armenia Georgia Macedonia Poland Belarus Turkey Albania Azerbaijan Serbia Bosnia & H. Croatia Montenegro 100ms - 159ms Latvia Bulgaria Romania Lithuania - 5,000 10,000 15,000 20,000 25,000 30,000 Average Download Speed (kbps) Source: Ookla Speedtest.net Net Index 2013 Cisco and/or its affiliates. All rights reserved. 47

Fixed Speeds + Latency: CEE Countries Average Upload Speed (kbps) 25,000 20,000 15,000 10,000 5,000 - Less than 100ms Russia Moldova Albania Ukraine Ave download: 2.6mbps Ave upload: 1.0mbps Czech Rep. Ave latency: 102ms Slovenia Estonia Slovakia Hungary Armenia Georgia Macedonia Poland Belarus Turkey Albania Azerbaijan Serbia Bosnia & H. Croatia Montenegro 100ms - 159ms Latvia Bulgaria Romania Lithuania - 5,000 10,000 15,000 20,000 25,000 30,000 Average Download Speed (kbps) Source: Ookla Speedtest.net Net Index 2013 Cisco and/or its affiliates. All rights reserved. 48

Fixed Speeds + Latency: CEE Countries Average Upload Speed (kbps) 25,000 20,000 15,000 10,000 5,000 - Less than 100ms Macedonia Russia Moldova Ave download: 5.6mbps Ukraine Ave upload: 2.1mbps Ave latency: 60ms Czech Rep. Slovenia Estonia Slovakia Hungary Armenia Georgia Macedonia Poland Belarus Turkey Albania Azerbaijan Serbia Bosnia & H. Croatia Montenegro 100ms - 159ms Latvia Bulgaria Romania Lithuania - 5,000 10,000 15,000 20,000 25,000 30,000 Average Download Speed (kbps) Source: Ookla Speedtest.net Net Index 2013 Cisco and/or its affiliates. All rights reserved. 49

Fixed Speeds + Latency: CEE Countries Average Upload Speed (kbps) 25,000 20,000 15,000 10,000 5,000 - Less than 100ms Russia Moldova Ukraine Serbia Ave download: 4.2mbps Czech Rep. Ave upload: 0.9mbps Ave latency: 59ms Slovenia Estonia Slovakia Hungary Armenia Georgia Macedonia Poland Belarus Turkey Albania Azerbaijan Serbia Bosnia & H. Croatia Montenegro 100ms - 159ms Latvia Bulgaria Romania Lithuania - 5,000 10,000 15,000 20,000 25,000 30,000 Average Download Speed (kbps) Source: Ookla Speedtest.net Net Index 2013 Cisco and/or its affiliates. All rights reserved. 50

Fixed Speeds + Latency: CEE Countries Average Upload Speed (kbps) 25,000 20,000 15,000 10,000 5,000 - Less than 100ms Russia Moldova Ukraine Montenegro Ave download: 3.5mbps Czech Rep. Ave upload: 0.7mbps Slovenia Estonia Slovakia Ave latency: 75ms Hungary Armenia Georgia Macedonia Poland Belarus Turkey Albania Azerbaijan Serbia Bosnia & H. Croatia Montenegro 100ms - 159ms Latvia Bulgaria Romania Lithuania - 5,000 10,000 15,000 20,000 25,000 30,000 Average Download Speed (kbps) Source: Ookla Speedtest.net Net Index 2013 Cisco and/or its affiliates. All rights reserved. 51

Fixed Speeds + Latency: CEE Countries Average Upload Speed (kbps) 25,000 20,000 15,000 10,000 5,000 - Less than 100ms Russia Ukraine Czech Rep. Slovenia Estonia Slovakia Hungary Armenia Georgia Macedonia Poland Belarus Turkey Albania Azerbaijan Serbia Bosnia & H. Croatia Montenegro Moldova 100ms - 159ms Latvia Bulgaria Romania Lithuania - 5,000 10,000 15,000 20,000 25,000 30,000 Average Download Speed (kbps) Romania Ave download: 22.9mbps Ave upload: 11.8mbps Ave latency: 39ms Source: Ookla Speedtest.net Net Index 2013 Cisco and/or its affiliates. All rights reserved. 52

Mobile Networks Upload/ Download Speeds Average Upload Speed (kbps) 2000 1800 1600 1400 1200 1000 800 600 400 200 0 Other Countries Central and Eastern Europe Turkey Hungary Poland Romania Russia Ukraine 0 500 1000 1500 2000 2500 3000 3500 4000 Average Download Speed (kbps) Source: Ookla Speedtest.net Net Index 2013 Cisco and/or its affiliates. All rights reserved. 53

Mobile Speeds + Latency: CEE Countries Above 160ms 100 to 159ms Below 100ms Average Upload Speed (kbps) 2000 1800 1600 1400 1200 1000 800 600 400 200 0 Turkey Hungary Poland Romania Russia Ukraine 0 500 1000 1500 2000 2500 3000 3500 4000 Average Download Speed (kbps) Source: Ookla Speedtest.net Net Index 2013 Cisco and/or its affiliates. All rights reserved. 54

Summary and Implications More users, each using more bandwidth Each user will have more/more powerful devices Accelerated smartphone adoption Video and cloud driving demand and consumption 4G will dramatically increase data consumption Advanced Cloud Apps Require Advanced Networks-low latency Off-load increasingly important small cell complement Need more Spectrum Licensed and Unlicensed Need fibre for backhaul, middle mile and aggregation in access Networks becoming heterogeneous; need to be fit for purpose 2013 Cisco and/or its affiliates. All rights reserved. 56